Deepening local currency and capital markets in Turkey a priority for EBRD

In a move to support deepening local currency and local capital markets in Turkey, the EBRD has invested TRY 9 million in the TRY 46 million Turkish-lira denominated bond issued by the country’s second largest retailer, Migros.

It is the second time that the company is tapping debt capital markets in Turkey and builds on the success of its debut bond in July 2018. The new bond will be listed on Borsa Istanbul and proceeds will refinance the company’s short-term loans.

The Bank’s investment comes at a time of high volatility in the lira, when the right financing mix, including local currency financing, is critical for Turkish companies.

EBRD President Suma Chakrabarti visiting Turkey last week called for the deepening of local capital and currency markets which would expand access to long-term lira funding for the Turkish companies, making them more resilient to macroeconomic vulnerabilities. Such activity is a priority for the EBRD in Turkey.

Migros operates in 81 Turkish provinces, through a network of 2,048 food retail stores under the Migros, M-Jet, 5M, Kipa and Macrocenter banners. The company is also active in Kazakhstan and FYR Macedonia with 42 Ramstore stores. The total number of stores is 2,090 as of the end of September 2018.

Listed on Borsa Istanbul, the company is 50 per cent owned by Anadolu Group, a diversified fast-moving consumer goods group and a long-standing partner of the EBRD. 23.2 per cent of shares belong to private equity group BC Partners and the remaining 26.8 per cent are held by free float investors.

The EBRD is a major investor in Turkey. Since 2009, the Bank has invested almost €11 billion in various sectors of the Turkish economy with almost all investments in the private sector. These are combined with support for policies which help modernise the country’s economy and build up its resilience.